BRAZIL INSTITUTE
A Conversation with Judge Sérgio Fernando Moro
Handling Systemic
Corruption in Brazil
THE WOODROW WILSON INTERNATIONAL CENTER FOR SCHOLARS,
established by Congress in 1968 and headquartered in Washington, D.C., is a living n
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Linda B. & Tobia G. Mercuro, Dr. Alexander V. Mirtchev, Wayne Rogers, Leo Zickler
I
II
A Note on the Rule of Law Series
Once seen as a mere formality in a land of impunity, especially for individuals in positions of power in society,
Brazilian institutions have displayed in recent years a previously unsuspected capacity to bring people in high
places to justice. Nowhere is this shift more evident than in two high profile cases separated by almost a
decade and involving politicians, political operators, and business men accused of crimes of corruption.
The first involved a vote-buying scheme in Congress. The investigation originated in Congress with a
Parliamentary Commission of Investigation (CPI) in 2005 and concluded in 2012 with guilty verdicts from
Brazil’s Supreme Federal Court for twenty-five of the thirty-nine persons indicted. Twelve were sentenced to
unprecedented prison terms, including a former presidential chief of staff, the speaker of the lower House of
Congress, and the president and the treasurer of the political party in power at the time of the crimes.
The second case was brought to light by a federal criminal investigation launched in early 2014 on allegations
of large scale corruption against state oil company Petrobras. Dubbed the “Brazilian Oilgate” or Petrolão,
this investigation has led to dozens of indictments, including of a former president of the Republic, a sitting
president of the Senate, a speaker of the Brazilian House of Representatives (who has been expelled from
office by his peers), and a significant number of members of Congress. Other high profile individuals have
also been convicted and sentenced to prison terms, among them the heads of Brazil’s largest construction
contractors.
Expected to keep the Brazilian judicial system occupied for the foreseeable future, the Petrolão has fueled
a national crisis that led to the impeachment and removal of a president, deepened a severe recession, and
exposed the limits of a political and economic system that has reached its point of exhaustion. Despite the
obvious adverse short-term implications for Brazilian society, the corruption investigations have won solid
and enduring support among voters and the public in general. Remarkably, it has not resulted in diminishing
support for democracy. On the contrary, the unprecedented crisis has strengthened arguments for reform
and affirmation of government by people’s consent under the rule of law.
Inspired by the hopeful evolution of the nation’s crisis, the Brazil Institute launched in July 2016 a lecture series
to explore the various institutional aspects of this historic, ongoing transformation in Latin America’s largest
country. The initiative, reflective of a broader Wilson Center focus on the global fight against corruption, brings
to Washington audiences the judges, prosecutors, defense lawyers, legal experts, and practitioners engaged
in the evolution of justice and rule of law in Brazil. The series is conducted in partnership with the American
University’s Washington College of Law program on Legal and Judicial Studies. Edited proceedings of each
lecture will be available online, with lectures from the entire series collected in a volume to be published in
the second semester of 2017. It is our hope that the statements gathered in this series will shed light on the
ongoing efforts of a diverse group of actors to strengthen Brazilian institutions, and deepen the dialogue on
rule of law both within and beyond Brazil.
Paulo Sotero
Director, Brazil Institute
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JUDGE SÉRGIO FERNANDO MORO has been a central figure in efforts to confront corruption and affirm the rule of law in Brazil. He became a federal judge in
1995, one year after completing his bachelor of law degree at the Maringa State
University in his home state of Paraná. Dr. Moro subsequently complemented his
legal education through studying abroad, including at Harvard Law School, and received a Juris Doctor from the Federal University of Paraná in 2002.
Before being called to preside over cases in the Lava Jato Operation involving stateowned oil company Petrobas, Dr. Moro worked on a number of other high profile
cases. Notably, at the request of a justice of the Supreme Court, Dr. Moro served
as an auxiliary judge in the Mensalão case, which involved an unprecendeted investiation into a vote-buying scheme in the Brazilian Congress and concluded in 2012.
The BRAZIL INSTITUTE was honored to receive Dr. Moro in Washington, D.C.
on July 14, 2016. President and CEO of the Wilson Center JANE HARMAN
provided opening remarks. AMBASSADOR ANTHONY HARRINGTON, former
U.S. am-bassador to Brazil and chair of the Brazil Institute Advisory Council,
introduced Dr. Moro. JUDGE PETER MESSITTE, the senior U.S. district judge
for the District of Maryland, provided closing comments.
The speeches and dialogue contained in this volume have been edited for clarity by Paulo Sotero,
Anna Prusa, and Natalie Kosloff. Special thanks go to Camila Velloso for transcribing the Q&A session
and to Kathy Butterfield and Kerrin Cuison for the design.
Handling Systemic
Corruption in Brazil
Sérgio Fernando Moro
Federal Judge of the 13th Federal Criminal Court of Curitiba
Brazil Institute at the Woodrow Wilson International Center for Scholars
Washington, July 14, 2016
I
want to thank Mr. Paulo Sotero for
which would be the equivalent to the juge
the invitation and for the opportunity
d’ instruction in France. The police have
to speak here at the Wilson Center. I
responsibility over the investigation of a
am grateful also to Ambassador Anthony
crime. In this task, the police work with
Harrington for his kind introduction, and to
the Prosecutor’s Office, which we call the
Judge Peter Messitte and the Washington
Ministério Público. Our Ministério Público
College of Law at American University for
is comparable to the Fiscalía General del
co-sponsoring this presentation on “Handling
Estado in the Spanish system. Prosecutors
Political Corruption Cases in Brazil.”
are responsible for producing, presententing,
It is an honor and a pleasure to be here.
I prepared some written remarks to explain
Brazil’s criminal justice system and the Lava
Jato Operation. I will be happy to answer
questions after I speak and Judge Messitte
offers his comments.
and sustaining in court the criminal charges
or accusation against one or more defendants.
I am a federal trial judge—one approximately
of 1,600 federal judges working at the “first
instance” in Brazil: a role that corresponds in
the United States to that of a federal district
judge like Judge Peter Messitte. Criminal
I apologize for reading the text of my lecture,
cases are usually tried and sentenced in Brazil
but I am not so comfortable with English as
by a trial judge sitting alone. He or she is a
to do it without the support of a written text.
professional career judge. To become a judge,
you have to pass a series of public tests.
First, let me say a few words about Brazilian
criminal justice. I presume that most of you
In Brazil, we have jury trial only for murder
are not familiar with it and that sharing some
cases. After a sentence, the prosecution
basic information will help your understanding
or the defense can submit an appeal to an
of the topic.
appeals court. Our appeals courts meet as a
panel of career judges, usually three or five.
I am not an investigating judge. We do
The party that loses an appeal at this level in
not have in Brazil anything similar to that,
entitled to present a special appeal to one
1
…as in United States and other countries, the judge in
Brazil can order pre-trial detention if the defendant
presents a danger to other individuals or to the
society, or if there is a risk that the defendant will flee
or obstruct justice... Pre-trial detentions are of course
exceptions and not the rule.
of our superior courts in Brasília: the Federal
Until recently, in Brazil the enforcement
Supreme Tribunal, equivalent to the Supreme
of a criminal conviction was possible only
Court in the United States, if the case involves
after the case reached a final decision that
a constitutional question; or to the Superior
could no longer be appealed. Enforcement
Court of Justice, if the question raised on
of a criminal sentence depended on the
appeal involves a federal statute. It usually
judgement of the last appeal. Only then
takes a long time to reach a final decision
would the case be seen as transitado em
in complex cases, if the prosecution or the
julgado: tried with no possibility of being
defense submit all these appeals, especially
appealed. In many, if not in most cases, it
to the superior courts in Brasília, because
could take ten years or more to reach a final
these courts already have a heavy caseload.
decision because of the heavy caseload I
The trial judge also has other responsibilities.
For example, only he or she can order pre-trial
detention or authorize wiretaps or searches
and seizures. Only a judge can authorize the
2
mentioned before. Our Supreme Court ruled
in this way in a 2008 decision regarding a
controversial interpretation of presumption of
innocence in Brazilian Constitution.
lifting of bank secrecy protections and request
Of course, as in United States and other
bank records during an investigation. There
countries, the judge in Brazil can order pre-
are a few exceptions, but this is the general
trial detention if the defendant presents a
rule. So, even before the trial, the judge
danger to other individuals or to the society,
can be involved in the case if one or more
or if there is a risk that the defendant will flee
of the steps I just described are deemed
or obstruct justice. I am aware that the U.S.
necessary to the investigation. In this
Criminal Code also allows a judge to order
scenario, however, the judge plays a passive
pre-trial detention or deny bail if there are
role as he or she rules on the requests from
similar risks (18 U.S.C. § 3142). If I am not
the police or the prosecutors.
mistaken, the U.S. Supreme Court ruled in
United States v. Salerno, a 1987 case, that
investigation, if investigations produce
this statute was constitutional (United States
evidence of criminal conduct by a federal
v. Salerno, 481 U.S. 739 [1987]).
congressman, for instance, the judge has
Pre-trial detentions are of course exceptions
and not the rule.
to send it to the Supreme Court. But, as I
already said, our Supreme Court has a heavy
caseload, which makes it very difficult to
In the Brazilian judicial system, the Supreme
have these criminal charges adjudicated in a
Court has original jurisdiction over criminal
timely way, as mandated by the Constitution
charges involving high federal official
and expected by the public.
authorities like the president, the vicepresident, cabinet ministers and members
of the federal Congress. So, in a criminal
In Brazil, we have federal courts and state
courts. Federal courts have jurisdiction over
cases involving violations of federal laws
Judge Sérgio Moro at the Brazil Institute (July 14, 2016)
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As a rule, [Brazilian criminal justice] does not
work very well in complex cases, especially in
white collar crimes, including bribery and money
laundering cases.
like crimes committed against a federal
ago, in 2012. In criminal case 470, also
institution or a federal company.
known in Brazil by as the Mensalão, our
This is, in general lines, a description of
Brazilian criminal justice.
Supreme Court convicted highly-placed
politicians, including a former chief-minister
of the federal government and several
As a rule, it does not work very well in
congressmen, political leaders, political
complex cases, especially in white collar
party operatives, and bank directors
crimes, including bribery and money
accused of bribery and money laundering.
laundering cases.
These verdicts marked a clear break with
a past of weak enforcement of the law
There are two main reasons. First, the
against these kinds of crimes.
slowness of the whole judicial process
delays the final judgment and negatively
Two year later came the Lava Jato Operation.
impacts the chances of a serious
I heard that here it is called the Car Wash
enforcement of the criminal law in complex
Operation. But I prefer the Brazilian name
cases. In this sort of cases, it was very
Lava Jato, which has a double meaning.
common, until recently, that you never saw
a final decision—even in cases in which
defendants who were accused and found
guilty in a court of first instance (like mine) of
very serious crimes, including taking millions
Its core is the Petrobras scandal involving
bribes paid in multiple public contracts to
close to one hundred people. Maybe more.
in bribes. As a rule, these defendants would
In this case, prosecutors decided to
never go to prison. Second, because of the
pursue separate charges against dozens
heavy caseload, the special jurisdiction of
of defendants. So there is not a single
the Supreme Court over criminal charges
accusation, but several. Some of them have
involving high official authorities worked, as a
already been tried. Some are pending cases.
rule, like a strong shield against the effective
accountability of the people in high places.
4
The Lava Jato Operation is not a single case.
I cannot say much about the criminal cases
still pending. But I can share some of
Things started to change in a famous criminal
my reflections about the cases that have
case decided by our Supreme Court four years
already been tried.
As usually happens in criminal
Facing long prison terms, Alberto Youssef and
investigations, Lava Jato started small.
Paulo Costa agreed, in the second half of 2014,
The Federal Police were investigating four
to make plea agreements with prosecutors.
individuals involved in what seemed to be,
at the time, a crime of money laundering
and illegal financial operations in the moneyexchange black market.
In summary, the information they provided
revealed that, as a rule, in every contract
Petrobras had with top Brazilian construction
companies, these companies payed
One of these individuals, named Alberto
kickbacks of 1-2 percent of the total value of
Youssef, had connections with a former
the contract. Alberto Youssef was in charge
director of Petrobras, Paulo Roberto Costa.
of organizing the financial scheme. Paulo
Petrobras is a big, federally-owned Brazilian
Costa received a share of the bribes. A share
company responsible for the exploration of
of the money went to politicians, including
oil and gas. It is a major state entity in Brazil,
federal legislators of the Popular Party (PP),
our country’s largest company and one of the
which was part of the ruling coalition. The
world’s largest oil companies.
Popular Party had nominated Paulo Costa for
In March of 2014, I authorized searches and
his job at Petrobras.
seizures in the offices and houses of the two
Youssef and Costa revealed also that other
individuals I just mentioned. When I learned
Petrobras officials had received bribes
from federal law enforcement officials that
and had worked with intermediaries and
Paulo Costa had tried to destroy or to hide
politicians of other parties in the governing
paper evidence from these searches and
coalition, such as the Workers’ Party (PT)
seizures, I ordered his pre-trial detention.
and the Party of the Brazilian Democratic
Alberto Youssef was also arrested in pre-trial
Movement (PMDB).
detention for different reasons.
The investigations continued to produce new
Looking at banking records of Alberto
evidence, including from plea agreements
Youssef’s enterprises, police and
with other cooperating criminals.
prosecutors discovered that his accounts
had received millions in credits from
some of the biggest Brazilian construction
companies. These companies were also
major suppliers of Petrobras.
In another line of the investigation, it was
discovered, with the assistance of Swiss
authorities, that Paulo Costa had millions of
Of course, everything that a cooperating
criminal says has to be supported by
additional evidence. In that regard, there are
lots of investigations still underway.
But it has been possible in some cases to
get evidence which supports information
revealed by cooperating criminals.
dollars deposited in off-shore accounts in
Some critics of the Lava Jato Operation say
Swiss banks.
that it depends too much on information
This is where and how the investigation
started.
obtained under plea agreements. The truth
is that the case involves the use of several
other investigations methods.
5
The old strategy of following the money remains the
most important method of investigation. Especially
important, in that regard, has been the legal
suspension of secrecy protections of bank accounts
used by these criminals…
The old strategy of following the money
as facilitators and beneficiaries of bribes or
remains the most important method of
kickbacks), and the intermediaries between
investigation. Especially important, in that
these two groups.
regard, has been the legal suspension of
secrecy protections of bank accounts used
by these criminals, usually in combination
with front companies or strawmen, and an
extensive examination of banking records.
International cooperation was used extensively
to discover secret accounts that Petrobras
officials and politicians maintained abroad.
It is true, however, that sometimes the
only people who served as witness of
complex criminal conduct are those who
are themselves involved in the crime. With
plea agreements, the prosecutors and the
police could turn each accused against the
other, and break the secrecy over complex
criminal conduct.
been convicted and sentenced to prison
terms. Two of those decided, after serving
part of their prison sentences, to cooperate
with the investigation. The police and
prosecutors discovered that all four of
them had off-shore accounts with balances
of millions of dollars in countries such
Switzerland, Monaco, and Luxemburg.
In at least three cases, there were
convictions of former federal legislators
who had received bribes in the Petrobras
scandal. In a third case, it was proven that
money from the bribes had been directed
to illicit financing of a political party. An
interesting fact is that two of these former
Looking at the cases already tried, there have
federal legislators had also received bribes
been to date about eleven sentences which
in the Mensalão case. The investigation
were specifically related to crimes of bribery in
also revealed that they received bribes from
contracts involving Petrobras. In eight of them,
Petrobras scandal even as the trial of the
the persons convicted were top executives of
Mensalão case by the Supreme Court was
the biggest construction companies (acting as
going on.
corruptors), top executives of Petrobras (acting
6
Four former directors of Petrobras have
To illustrate the magnitude of these corrupt
with the prosecutors. They committed
practices, a manager at Petrobras—after
to reveal illicit acts, to abandon criminal
reaching a deal to collaborate with the
practices, to implement efficient systems of
authorities—agreed to returned nearly $97
compliance and to compensate public coffers
million in bribes that he had received from
by returning more than 1.5 billion reais.
Petrobras contracts and kept in secret bank
accounts abroad. The more troublesome aspect of the case
was that it seems that payment of bribes on
In the beginning the investigation, Petrobras
Petrobras contracts was not an exception
assumed a posture of general denial. It did
but rather the rule. Some of the cooperating
not recognize any problem of governance.
criminals used that word. They described the
As the investigation developed, the company
crimes they committed as “a rule of the game
gradually started to admit that crimes were
for public sector contracts.” Some of them
committed. This culminated in an official
stated that this criminal practice went beyond
recognition, in its 2015 annual report to
what happened with Petrobras and was used
shareholders, of losses from corruption of
by other companies and in other branches of
nearly 6 billion reais (about $1.7 billion at the
the federal government.
current exchange rate).
As I said, there are ongoing investigations
It took time, but after a while, to their
not only in my court but also in others
credit, some of the construction companies
federal courts that received parts of the
involved in the scheme also began to
case. Dozens of highly placed politicians,
recognize their responsibility. Two large
especially congressmen, are being
Brazilian companies reached leniency deals
investigated by the chief federal prosecutor
Judge Peter Messitte at the Brazil Institute (July 14, 2016 in Washington, D.C.)
7
before the Supreme Court. Some of them
can affect investment decisions by public
have been charged already, including the
and private entities. Perhaps some bad
former speaker of the House.
investments made by Petrobras can be
All of these disturbing facts, especially the
cases already sentenced, allow us to conclude
that an environment of systemic corruption
was uncovered by the investigation.
explained not simply as a result of a bad
judgment or unlucky choice, but instead as a
deliberate choice by corrupt directors of Brazil’s
largest enterprise to generate bribes rather
than make the best decision from an economic
Corruption, as an isolated crime, exists all
point of view. One example is the ongoing
around the world. But systemic corruption,
investigation over the purchase by Petrobras
the payment of bribes as a rule of the game,
of an oil refinary in Pasadena, Texas. One
is not really that common, and it represents
witness said that they deliberately decided
a severe degeneration of public and private
to buy an old refinery because they were
customs, especially in democratic nations.
already thinking about bribes that would be
paid on a billion-dollar contract to renovate it.
The costs of systemic corruption are
enormous.
Another detrimental effect of systemic
corruption is that it chases away local and
First, the cost of bribes, which are usually
foreign investors. If the market is not clean
added by the offending company to a
and transparent, if bribes and cheating are
contract with the government or a state-
the rule, a responsible investor will not have
owned company, affects public budgets.
confidence in that market and you will not
Imagine that this is not an isolated practice
put its money in it.
but a general rule, and you will understand
how it can affect the management of
Above all, systemic corruption is damaging
public resources.
because it impacts confidence in the rule of
law and in democracy. If the law does not
Moreover, the need to generate funds for
apply to everyone, there is a progressive
bribes in systemic corruption schemes
erosion of trust in democracy.
Corruption, as an isolated crime, exists all around the
world. But systemic corruption, the payment of bribes
as a rule of the game, is not really that common, and it
represents a severe degeneration of public and private
customs, especially in democratic nations.
8
Faced with the revelation of systemic
and private sectors, reducing incentives and
corruption, what should be done?
opportunities for corrupt practices.
First, the judicial system must work.
Freedom of the press and access to
Crimes that are uncovered and proven,
information is also essential.
respecting due process, must be punished.
The control of those who govern by the
Justice works when the innocent person
governed demands citizens that are well-
goes home and the guilty person goes to
informed about the management of public life.
prison. The outcome should not depend on
the economic or political conditions of the
defendant. There is still much to be done to
advance in this respect.
Since the beginning of these investigations,
it was our decision that we would not hide
any information or evidence from the public.
The Brazilian Constitution requires that the
Yet, the Lava Jato Operation, just as other
judicial process be open to public scrutiny.
recent cases in Brazil, reveals that much can
We cannot have cases prosecuted and
be done, even under the current system,
tried in secret. No, we have to be able to
as long as the problem is confronted and
assert that once the investigation is finished,
treated with seriousness. Justice cannot
everything—the prosecution, the evidence,
be make-believe, with cases that never end
the hearing of witnesses, the judgement
and people who have been proven guilty of
and the sentencing—has been conducted
crimes but are never punished.
under the light of the sun. In that regard, I
The adequate functioning of the criminal
justice system is a necessary, though not a
sufficient condition to eliminate systemic
corruption. It is necessary that other public
institutions, the executive and legislative
branches of government, adopt public
take this opportunity to speak at the Wilson
Center to celebrate the memory of Justice
Louis Brandeis, who was elevated to the U.S.
Supreme Court by President Woodrow Wilson
100 years ago. Justice Brandeis once said that
“sunlight is the best of disinfectants.”
policies aimed at preventing and combating
This is important. Not because we want
of corruption. Systemic corruption is not
to judge these cases in the realm of public
and cannot be a problem only for the
opinion or to manipulate public opinion.
judiciary branch.
It is important to prevent any attempt by
Let’s be clear: the government is the
powerful defendants to obstruct justice.
principal actor responsible for creating a
In fighting systemic corruption, private
political and economic environment free
sector initiative has also a relevant role.
of systemic corruption. The government,
Corruption involves those who make illicit
with greater visibility and power, teaches
payments and those who receive them.
by example.
Both parties are guilty.
Better laws can be approved to improve
Companies must do their homework,
the efficiency of the criminal justice system
saying “no” to the payment of a bribe,
and to increase the transparency and
implementing mechanisms of internal control
predictability of relations between the public
and denouncing requests or demands for
9
From left to right: Brazil Institute Director Paulo Sotero, Ambassador Anthony Harrington, Wilson Center President and
CEO Jane Harmon, Judge Sérgio Moro, Judge Peter Messitte, and former Brazilian Finance Minister Joaquim Levy
payment of a bribe. It is also important to act
It is rather part of the cure. Once systemic
collectively, so that companies involved in
corruption is discovered, necessary public
corrupt practices are identified and isolated
policies should be adopted and implemented
from the market and are not allowed to
to overcome it. The problem cannot be
assume a preeminent position. This is not only
resolved by sweeping it under the rug.
the legal and the right thing to do. It is also an
obligation that we in Brazil, as a democratic
nation, have voluntarily accepted by signing
every relevant anti-corruption convention
and agreement negotiated under the United
Nations, the Organization of American States,
and other international fora. Faced with
past, because of the dimension of the
crimes that have been uncovered, Lava
Jato Operation provides Brazil with the
opportunity to take the necessary steps to
overcome this shameful practice.
allegations of corruption, we do not have the
It is too soon to say whether that will happen
option of doing nothing. We must act.
or whether corruption will be contained and
Much can be done, and it is important
to keep in mind that systemic corruption
10
Perhaps more than any other case in the
reduced to more reasonable size in Brazil. It
is difficult today to make predictions.
is a product of institutional and cultural
There have been reactions to Operação Lava
weaknesses. No country is predestined to
Jato, of course. These have come especially
live with systemic corruption, since it’s not
from some of the companies involved and
a natural phenomenon. Discovering and
from senior politicians. Some critics have
revealing it, even if it generates impacts in
complained that Lava Jato Operation is not
the short term, is not part of the problem.
impartial and has been used to play politics.
That is not right. Of course, if the crime
The crimes committed against the Brazilian
involves bribes paid to senior politicians,
state are becoming known because of the
the case will inevitably have political
efforts by many Brazilians to face and fight
consequences. But this happens outside the
the problem. The police, the prosecutors, and
court and the judge does not have control of
the judiciary are seriously dealing with it.
it. Some critics say that Lava Jato Operation
represents the criminalization of politics. The
blame should not, however, be aimed at the
judicial process, but rather at the politicians
who committed the crimes. The judicial
process is just a consequence. The judiciary
system could not and cannot turn a blind eye
in the face of the alleged crimes. Some critics
says that due process is not being respected. I
disagree. Every aspect of this judicial process
is being conducted in open court, with respect
for the rights of the defendants and based on
extensive evidence obtained, processed, and
It is of course still an ongoing investigation.
Some of the results of the cases already tried
have no precedent in Brazil. We had several
corruption scandals in our history. But never
before Lava Jato were top executives at the
country’s biggest construction companies
arrested, tried, and convicted. Never, before
Lava Jato, had a director of Petrobras been
charged with a crime. Today, we have four
of them convicted and serving prison terms.
Several congressmen are being investigated
and prosecuted before the Supreme Court.
publicized under the law. Lava Jato is not a
I believe this is progress in the implementation
witch-hunt. The problem is that the evidence
of the rule of law in our country. And it has
of corruption revealed by the investigations
had beneficial collateral effects. In a possible
was so widespread that the case took giant
positive collateral effect of the investigations
proportions, with numerous detentions and
of the Petrobras’ scandal, our Supreme Court
convictions. But nobody is being charged or
overruled a past decision that postponed
convicted based on political opinion. Where
indefinitely the execution of a prison
there is evidence of illegal conduct, the
sentence, as I mentioned at the beginning.
accused are being charged and sometimes
Now, thanks to a new interpretation by our
convicted because of the bribery and money
Supreme Court, a criminal conviction can
laundering crimes they have been convicted
be enforced immediately after it is affirmed
of. Some have also been cleared and let go.
by a Court of Appeals. So, society no longer
Only a fraction, 4 percent, of hundreds of
has to wait for a final decision at the highest
decisions made under the Lava Jato case
level of appeal, which, as I said earlier, can
have been modified by superior courts. That is
take an eternity. This amounts to a judicial
obviously very different from a witch-hunt.
revolution of sorts in the enforcement of
To summarize, reality has presented us in
Brazil with an opportunity to face systemic
corruption. I read sometimes, in foreign
newspapers, criticism of the systemic
corruption uncovered in Brazil. The critics are
correct. What has been exposed is indeed
criminal law in complex cases in Brazil. Our
Supreme Court has clearly demonstrated
with this new ruling that it fully understands
the connection between systemic corruption
and impunity. For this ruling, it deserves a lot
of compliments and our collective gratitude.
shameful. But there is another way to look to
It is also true that until now the Federal
look at this picture.
Police, federal prosecutors and the federal
11
judiciary have been the main protagonists
rally in protest against systemic corruption
in our nation’s efforts against systemic
and in support of the Lava Jato Operation.
corruption. So far, the executive branch
This attitude of our country’s citizens give
and Congress have made no significant
us great hope. The fight against corruption
contribution to Brazil’s efforts against
has definitely entered in Brazil’s public
corruption. They could do so by proposing
policy agenda and will influence our political
and approving better laws to prevent
debates. This is positive.
corruption. They could also help efforts of the
law enforcement agents in other ways. Their
omission is very disappointing.
be able to look back and say that Lava Jato
Operation was part of the strengthening
In spite of that, it is important to highlight
of the rule of law and democracy in Brazil.
that last year and this year millions of
Maybe we will be able to say that systemic
Brazilians protested in the streets against
corruption existed in our country but was
corruption. It was under that sort of
overcome and became a sad memory of
popular pressure that Congress expanded
the past. Obviously, we cannot take this for
plea bargain agreements in late 2013. On
granted, but it is necessary to constantly
March 13 of this year, more than three
remind ourselves that we are doing what
million people occupied streets in several
needs to be done to advance the rule of law,
state capitals and major cities of Brazil in
and to have some hope. I am confident that
peaceful demonstrations. It is true that these
the Brazilian judiciary, prosecutors, police,
demonstrations were motivated by many
and other law enforcement officials will keep
causes, like dissatisfaction with the state of
on doing their job.
the economy and with the government. But
it is also true that a common cause uniting
the demonstrators and the country was to
12
Hopefully, some years from now we will
I thank you very much for your attention. I will
be glad to answer your questions.
Remarks from the Hon. Peter Messitte
Senior Judge, U.S. District Court for the District of Maryland
I
would like to offer some perspective as
despite receiving a Rolex watch and having
an American and as an American judge.
his daughter’s wedding paid for, was to set
In the United States we have had our
up meetings for a constituent. Still, the Court
share of scandals, from the Yazoo Land
suggested that his actions were “tawdry,” if
Scandal in the State of Georgia in the early
not illegal.
days of the Republic to Tammany Hall, from
Teapot Dome to Abscam. [The list] goes on.
You will note that most of our prosecutions
for political corruption occur in federal court.
Like Judge Moro, I am a federal district judge,
which is to say a trial judge of “first instance.”
I have tried cases of political corruption, but
nothing of the scale that he has. He has been
Because Brazil historically was only one
a judge for a long time, since he was a young
colony and not thirteen separate colonies as
man. We do not have that sort of thing in the
in the United States, issues of states’ rights
United States, since judging in this country
and states’ sovereignty really do not arise
is not a career choice. One ordinarily has
in Brazil. This is why most laws in Brazil, not
to have a prior career as an attorney, earn a
just bribery and money laundering crimes,
decent reputation, and then be appointed
are national in scope. Similarly, substantive
by the governor to a state court judgeship or
and procedural civil and penal codes are
by the president to a federal judgeship. But
national in scope. They are applied by both
judging is a career option in Brazil, so Judge
federal and state court judges in Brazil. This is
Moro began his career as a judge at an early
not so in the United States, where everyday
age and was very accomplished because he
crimes are defined and prosecuted in each
had to pass a rigorous exam and be promoted
of the fifty different states. But we also
along the way. I was first appointed a judge
prosecute a lot of state corruption cases in
at age forty-four, which happens to be Judge
federal court, because if you are prosecuting
Moro’s age today.
a governor of a state and you happen to
be a judge appointed by that governor, this
obviously poses some problems.
In the United States, as in Brazil, political
corruption investigations are mostly
conducted at the federal level. In Brazil,
This was the case with former Governor of
the Federal Police, who function much as
Virginia Robert McDonnell, who was tried
the FBI does here, undertake most of the
by the Federal District Court and convicted,
investigating and then turn the evidence
but who was recently exonerated by the
over to the Public Ministry or Prosecutor’s
Supreme Court. The Supreme Court, I might
Office. That would be comparable to the
add, decided unanimously that he was not
U.S. Attorney’s Office. In this country, the
guilty. Because all he did, said the Court,
prosecutor develops the case and typically
13
presents it to a grand jury, which is an
Federal district court judges in the United
institution that you do not find in Brazil.
States typically have the same authority
You will remember that the grand jury is
as Judge Moro does in Brazil, but one of
composed of twenty-three individuals who
the differences I have noticed in the United
decide whether there is probable cause to
States is that when you are preparing
charge someone with a crime before they
a criminal case [in Brazil], if you are a
can be charged. If the grand jury decides to
defendant, you will know the names of
charge someone with a crime, they return
the government’s witnesses and your own
what is known as an indictment.
witnesses before trial and you will have an
Judges in the United States for the most part
are passive actors, but as in Brazil, the judge
does have an active role when it comes to
making certain decisions before trial. It is
up to the judge to authorize searches and
seizures, to authorize wiretaps and telephone
taps, and to authorize the breaking of bank
secrecy and access to bank records, even
access to internet accounts. You have to go
to the judge first. You need to show probable
cause [as we say] here, or, similarly in Brazil,
justa causa, to be able to do these things.
There has to be a colorable claim of illegality.
In the United States, in political corruption
cases, you can have a jury trial. The jury that
hears the case on the merits is called a petit
jury, which distinguishes it from the grand
jury. In the federal system this consists of
twelve citizens, selected randomly from
the voter lists of the state, who must
unanimously agree on someone’s guilt
before they can be found guilty. In the United
States, any crime that carries a possible
sentence of incarceration of more than
six months has a right to be tried before a
jury. Many defendants in the United States
in political corruption cases opt for a jury,
unless of course they choose to plead
guilty. Brazil is one of few countries that has
anything like a jury system, but it is limited to
homicide cases. It is clearly a borrowing from
Anglo-American judicial tradition.
14
opportunity to speak to those witnesses.
Again you must get the judge’s approval to
do so. Someone recently listed President
Dilma Rousseff as a witness and Judge
Moro ordered that she appear and be
available to be deposed. She would be
authorized to respond by writing but she
could not refuse to appear. In the United
States you can refuse to appear before a
grand jury or at a trial, but you will be held in
contempt. But in any case a witness does
not have any obligation to speak to a defense
attorney. In Brazil, as I have said, there is
an obligation to speak with the defense
attorney, if the judge approves it.
There has been mention of the concept of
“privileged forum.” This is something that is
unfamiliar to an American audience. In the
United States, if you are charged with a crime,
it does not matter who you are, you go first
to the ordinary trial court where you might
ask for a jury trial. And if you are convicted
you have the right to an intermediate appeal.
You may even have the right to appeal to the
U.S. Supreme Court or the state supreme
court. But in the United States, these highest
courts have what is known as “discretionary
review,” so they may choose not to hear the
case. In contrast, in Brazil, certain individuals
at a high level of government, such as the
president and members of Congress, have
the right to what is known as a privileged
forum. That means they are entitled to have
their cases heard in the first instance by the
The idea of plea bargaining in Brazil started
Supreme Supreme Court of Brazil. Our [U.S.]
with minor crimes, those carrying a possible
Supreme Court does not hear any criminal
penalty of no more than two years
cases of original instance. That is why, for
incarceration. Then very serious crimes were
Judge Moro, some of his cases are in the
included and now more recently financial
Supreme Court and some are with him in the
crimes. It has gotten to the point, depending
Curitiba Federal Court. He has to decide that
upon the severity of the case and the extent
some people ought to be before the Supreme
of the defendant’s cooperation, that the
Court and others before him in the Federal
judge can even pardon the defendant from
Court. It gets complicated, for example,
prosecution. This runs against the usual
when someone who is not the beneficiary
principle in Brazil and many civil law
of a privileged forum is caught on a wiretap
countries of what is known as “compulsory
discussing criminal activity with someone
prosecution,” meaning that the prosecutor
who is the beneficiary of the privileged forum.
is obligated to charge someone with all
One would be tried for a crime before the
crimes of which he may be guilty. In the
Supreme Court and the other before the usual
United States, the prosecutor is not obliged
federal trial court. Considering how many
to proceed in that fashion: he has total
times Judge Moro’s decisions have been
discretion. Take, for instance, the case of
appealed to the Supreme Court, [it is notable
Sammy “The Bull” Gravano, who was the
that] less than 4 percent of those decisions
underboss to John Gotti, the “Teflon Don”
have been turned around.
of the Mafia in New York. Sammy the Bull
The use of plea bargaining is one of the most
remarkable developments in Brazil. They
have been in use in certain ways for some
twenty-five years, but they have been used
with great effect in the Lava Jato case. Plea
bargaining occurs when the defendant is
had committed eighteen homicides, but
because of the extent of his cooperation
with the prosecutor—his testimony got
thirty-five mafioso to plead guilty—he was
given a five-year sentence. It was sort of a
pact with the devil.
charged with a crime and then, in order to
In Brazil, while the judge has extensive
cooperate with the government by turning
discretion in connection with sentencing for
state’s evidence against his colleagues,
certain financial crimes, it is more limited in
the prosecutor agrees not to charge the
respect of certain other crimes. Depending
defendant with any crime at all or reduces
on the nature of the offense and the extent
the number of crimes that the defendant
of the cooperation, the Brazilian judge
will be charged with or recommends to the
may be limited to taking off only one-third
judge that a reduced sentence be imposed.
or two-thirds of the possible statutory
In exchange, the defendant makes a deal—
sentence for the crime.
a bargain—which is written down and
sent to the federal court. The federal judge
then needs to verify that the agreement is
knowing and voluntary on the part of the
defendant and has to approve it. It is much
the same in Brazil.
Because of plea bargaining in Brazil, Judge
Moro has gotten a lot of people to speak out,
without which it would have been very hard to
make a case. In the United States, as in Brazil,
we have pre-trial or preventive detention, but
15
it is the exception, not the rule. In the federal
statute of limitations of five years, which
system, in any case, we only keep people in
means that the case has to be filed within
jail before trial if they pose a risk of flight or
five years of the commission of the crime.
present a danger to the community.
(There are exceptions which I need not go
There is an interesting aspect about putting
someone in jail after they are convicted by the
trial court. In the United States, you ordinarily
go to jail almost immediately following
conviction even while your appeal is pending.
In Brazil, you cannot be definitively put in jail
until your case is entirely adjudicated which
in the past meant it might go as far as the
Supreme Court. That could take many years,
limitation applies (and it varies depending on
the seriousness of the charges) continues to
run not only after charges are filed but until
the matter is finally adjudicated on appeal. If it
takes years for a case to get to the Supreme
Court, and in the meantime the statute of
limitations runs out, you will be exonerated.
You will be determined to be not guilty.
whereas in the meantime the defendant
Finally, one has to appreciate what Judge
would remain free (assuming there are no
Moro has been doing. He is handling
other valid reasons for detaining him before
hundreds of cases and defendants. He has
the final adjudication).
authorized many wire taps and searches
Recently, however, it has been provided
that once the second highest court of Brazil,
the Superior Tribunal of Justice, affirms the
decision of the trial court to incarcerate, the
defendant can be placed in jail even though
there may be further appeal to the Supreme
Court. That’s very different from the practice
in the United States.
16
into.) In Brazil, however, whatever period of
and seizures. No federal judge in the United
States has ever done anything like that. He
has really done a signal job and has inspired
the people of Brazil to believe that justice is a
real possibility and that the days of impunity
may be over. The Brazilian judiciary is looking
very good; it is strong and independent,
acting fully in accord with the Brazilian
Constitution. In my view, what is happening
There are also differences in the way the
in Brazil today is likely to become a model for
statutes of limitations are applied. In the
what will happen in other countries that also
United States, most federal crimes have a
suffer from political corruption.
Questions and Answers
Q: How long will you pursue the Lava
Q: Many people are wondering if you have
Jato case? And why is it so important for
avoided prosecuting people associated
you to constantly reveal your decisions
with the opposition (PSDB and its allies)?
to the press?
A: The law imposes consequences for all
A: I think there is an obligation to make the
those who commit a crime—it does not
details public. Public opinion in cases involving
matter if you are from the left or the right
powerful companies and powerful politicians
or the center. Based on the cases already
can help prevent obstruction of justice. And
judged, it seems clear that Petrobras was
our federal constitution says that the case
used for political purpose. For example, a
should be tried in public, in an open court.
political party would nominate a director
I cannot say for sure [how long it will take]
because it is an ongoing case, sometimes
new evidence appears. The part of the
investigation that is with us in Brazil could
finish by the end of the year, because most
of the enterprises that paid bribes have been
already charged and tried. But, for example,
the part that is with our Supreme Court—
involving the politicians—will take more
time because of the court’s heavy caseload.
For example, with the Mensalão case, the
Supreme Court took six years to judge the
case after receiving the charges.
The judicial process can be slow. I think
the privilege [of politicians] to have a
special forum is not working in Brazil.
There are dozens of these cases, and the
of Petrobras, and then the director would
take bribes for himself and for the party.
Given this situation, it is natural that many
of the politicians under investigation are
associated with the political parties that
were in power, and the Workers’ Party has
been in the power since 2002. But there are
also politicians from other political parties
answering charges before the Supreme
Court, including from the opposition.
However, sometimes politicians strike back
by saying you are playing politics.
Q: Could you talk about due process and
original jurisdiction, in the context of the
audio leaks involving President Dilma
Rousseff? Was due process followed in
that case?
Supreme Court also must decide important
A: This is a pending case, so I cannot say
constitutional issues. A number of people are
anything—just that I already sent information
now saying, and I agree, that we must limit
to the Supreme Court about this case.
the judicial privilege granted to politicians.
17
Q: There are at least two big projects
abroad—off-shore accounts in other
to fight corruption in Congress. How
jurisdictions—or accounts in Brazil with
optimistic are you? And do you think
front companies. From a legal point of view,
Senate leader Renan Calheiros will
however, a Brazilian judge can lift bank
attempt to limit plea bargains?
secrecy if there is probable cause (justa
A: I believe Congress will make the right
decision and reject laws that would obstruct
from the police.
justice in general, not solely because of their
Q: How can civil society—international
impact on the Lava Jato case. Plea bargains
organizations such as Transparency
play an important role in our system, and it
International as well as Brazilian ones—
is also important for judges to retain judicial
effectively demand better governance
independence. I hope Congress will also
in Brazil?
deliberate on the ten bills against corruption
presented by the Ministerio Publico. Of
course, Brazilian citizens must demand that
Congress do the right thing.
A: The public has powerful means for
pressuring Congress, and the government
as a whole, to do the right thing. You can
go to the streets, you use civil society
Q: How can the Brazilian people can be
organizations to present demands to
sure that plea bargains are effective, and
elected officials. The private sector can also
that those who sign plea bargains will
have a huge impact because if no one is
actually return the money they stole?
willing to pay bribes, the problem is solved.
A: You can use plea bargains without trusting
the criminal. Everything that a criminal says
in a plea agreement should be corroborated
through additional evidence. If the criminal
lies and the police or prosecutors discover
There is more than a single way to fight this
problem, but central to these efforts will be
mobilizing public opinion in favor of really
fighting corruption, not only in this case
with the Petrobras scandal, but everywhere.
later that he has more money, he will lose
Q: Could you discuss Brazil’s collaboration
the plea deal and, since he has already
with foreign governments on these cases?
confessed his guilt, he will suffer the full
consequences of his actions. Moreover,
police and prosecutors continue their
investigation regardless of the plea deal.
Q: What legal reasoning or standard
allows for bank secrecy to be suspended?
Has bank secrecy been lifted in previous
white-collar cases in Brazil?
18
causa) and a request from the prosecutors or
A: International cooperation is often key in
these complex cases, especially in money
laundering cases, because the criminal
hides money overseas and sometimes also
flees abroad.
The prosecutors and the federal police
are in charge of contact with international
authorities, so they would know more
A: Bank secrecy has been lifted in a
than I do. Portugal recently decided to
number of previous cases over the years,
extradite a Brazilian who sought to evade
but following the money has become
justice, and we have several cases involving
more complicated. Criminals use accounts
international cooperation with the United
States. Switzerland also cooperates with us,
Association are sometimes significantly
and we have gained a great deal of evidence
involved in law reform. Where does the
in these cases from Switzerland—such as
Brazilian bar stand on these challenges?
the fortune kept in offshore accounts by the
former Petrobras director, for example.
A: The Brazilian bar association (OB)
has a long history: it fought the military
Q: Lava Jato has led to multiple
government and demanded democracy.
proceeding in different courts. Are there
Now, they are officially against systemic
concerns about double jeopardy issues,
corruption. They demand, for example, that
where the defendant may be tried several
politicians charged with committing serious
times on the same charge?
crimes should be expelled from office. But it
A: The different court systems judge
different types of cases. The TCU [the
sometimes seems that everyone is against
corruption and yet nothing changes.
Federal Accounting Court], for example,
A: (from Peter Messitte) Just a quick
decides only administrative issues. There
supplement. Our [U.S.] bar association
is a chance that some of these people or
may be a little more neutral, but there
companies could be tried by the criminal
are institutions in Brazil which do look
courts and by the administrative courts, but
at judicial and legal reform. The Ministry
it would not be for the same conduct, so
of Justice has a secretary for judicial
I think there is no risk of double jeopardy.
reform—we have nothing like this in the
This may be more a problem for people who
U.S. Department of Justice. There is also a
commit transnational crimes, because they
National Council of Justice in Brazil, which
can sometimes be tried in both countries.
considers judicial and legal reform issues.
Q: There is a civil lawsuit going on in New
York against Petrobras, which has 183
complainants, with a ruling expected at
the end of September. What effect it will
have on the criminal cases in Brazil?
A: I have not knowledge of the case beyond
what I have read in the newspapers, but
These are institutional, semi-governmental,
or governmental organizations. So the
association of lawyers is really only one
piece of the picture.
Q: Can you speak about the pressures you
are facing in your work? And do you feel
safe, given the nature of your work?
I do not think the ruling will impact our
A: I have not received any direct threats that
cases. It could impact Petrobras, but that
would interfere with my work. I sometimes
is not something we in Brazil—the judges,
think people overestimate my job, since
prosecutors, and police—have any control
the cases depend on the jobs of judges
over. I will note that Petrobras is a state-owned
across all levels of the judiciary and I am
company, so I view it as a victim of these
not an investigating judge. I only rule on the
crimes because at the end of the day, it is the
requests of the prosecutors and the Federal
Brazilian people who will pay for the damage.
Police. As to my safety, the rule is that you
Q: In the United States, the American
Law Institute and the American Bar
never talk about your security procedure, so
I am not going to say anything.
19
Q: With over 50 percent of the Brazilian
statement—although everyone knew it
Congress under investigation for one
was true. What I find positive is that now
reason or another, would you consider
there are judges in Brazil saying yes, we
running for public office in the future?
have systemic corruption and
A: I’m running for vacation only.
Q: Could you explain the difference
between the Portuguese “Lava Jato”
and the English “Car Wash,” and the
double meaning?
this perspective?
A: Yes, we have systemic corruption, but
Brazil’s institutions and people are facing
the problem and taking serious steps in
the fight against system corruption. It is
A: One of the first individuals investigated
not guaranteed that we will get there—we
was owner of a gas station in Brasilia, and he
have to work at it, and Brazilians should not
was convicted for using that gas station to
wait for the government to deal with the
launder money—not just bribes, but also drug
problem. We all need to work together. But
money. The gas station also had a car wash,
I think this change shows that there is a
so the case became known as “Lava Jato.”
light at end of the tunnel.
But the words have a second meaning: that
you are laundering the money very quickly.
Q: Ambassador Melvyn Levitsky gave an
interview in the 1990s in which he said
Brazil had endemic corruption. Brazilians
were, at the time, quite angry over his
20
we are fighting it. What do you think of
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